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tv   Your World With Neil Cavuto  FOX News  April 10, 2012 4:00pm-5:00pm EDT

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>>neil: what the heck happened? what the market has given it has taken away. this is the worst losing streak of 2012. welcome, everyone, i am neil cavuto. what the heck happened? stocks slammed. again. the dow down five straight days more than 500 points. we have slow down worries, we have earnings worries, we have spain and italy economies collapsing worries. we have rocking worries across the globe and we are on top of it all and now the stock shop. including the possible earning shock and the former ahead of the new york stock exchange on all the aftershocks. what happened? >>guest: well, it started in european as a reaction to unemployment numbers which came out on friday and were below expectations. also, investors are weary of lending italian and spanish
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governments money. also, investors are worried of the start of earning season in the united states kicking off with alcoa after nine consecutive quarters of growth they are warning earnings could be plat and small business confidence slipped for the first type in six months supporting the notion that maybe economic growth is slowing. all that chipping away at the blockbuster first quarter we saw. there is a silver lining, oil is falling, that is good. and it is possible wall street is overly worried about corporate earnings and companies will surprise the upside so you have to stay tuned. >>neil: thank you, and on a day we saw stocks careening, interest rates careening, generally and a ten-year north note has slipped below 2 percent
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which roughly could translate into certain mortgages again but normally when things slide with the fear the economy is sliding interest rates slide and they did today. separately we have a market gained sentiment index rocketing up rising fears that this will be more fear. who knows better than market sentiment than the guy who ran the new york stock exchange, dick grasso. what do you make of what is going on? what happened? why so fast? >>guest: well, great to be with you. it is predict average that given the way the market performed in the 4th quarter of last year and in the first quarter of this year, there was going to be some consolidation and a lot of people were hoping for a pull back. this pull back when you aggregate is 5 percent which is predictable for any bull market
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cycle. >>neil: the pull back is from the cycle high on this and down to 5 percent not a huge deal, but gets to be a huge deal. >>guest: you had a disappointing jobs report last week. you now have revived worries about what greece may or may not do in terms of meeting the target. you have seen the cost of borrowing in spain and italy rise. so, people are again concerned about the euro and the break up, the potential breakup of the euro and you add the icing to the cake, the president gives a wonderful political speech in terms of arousing his speech but a terrible policy speech. you do not want to talk about raising taxes and stifling capital investment and capital formation at a time when your
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economy needs stemlation -- stimulation. and that means look around the world: favorable taxv/ environment, favorable regulatory environment and leadership from both sides marching to the same tune. we do not have that. it has been 1,000 days since we have had a budget. we have a group of people who really believe that telling the same inaccurate stories consistently will get people to believe in those stories and it is just not going to happen. >>neil: what was interesting you mentioned the president's comments about reinstating the buffett rule those should not make over 30 percent in taxes but the footnote and context in the remarks, that this increase in taxes we would get from the rich, would not go toward debt relief, it would be done in the name of fairness and it would not be part of helping ease the
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debt burden which, i think, really aroused a lot of uninvesters saying maybe the debt should be uncontrol but we can think of a number of ways to do that rather than hike them on people like dick grasso, but, but, when the president essentially said and the white house said this would be done in the fame of "fairness," that did compound a lot of angst. >>guest: it is an assertion of reality. the moneys that would be raised by the lifting of the tax base for those earning $1 million or more that would do nothing to reduce the size of the deficit in this country. it would be absolutely fool play to say it would solve our problems. we need a substantive plan, neil, which raises revenue, but, also, cuts spending.
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one of the things we cannot forget is that if you take the time and very few people have, to look at paul ryan's budget role, he is not talking about cutting dollars out of medicare and medicaid and student aid. he is talking about slowing the growth. >>neil: you would think he is throwing grandma off the cliff. >>guest: if you listen to the pundit he is throwing grandmother ma off the cliff. we are in a presidential election cycle and this president, today, wanted to rally the base. great political speech. horrible policy speech. >>neil: we will get into that more but very good insight, great to hear from you. we do want to talk about before the sell off today, we had a sell off in europe, and a lot of the markets were closed yesterday for the extended easter holiday and today they
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have a chance to respond not only to our jobless figures, but, more importantly, worries about their own figures, particularly in italy and in greece where we have growing concerns that they headed for trouble. again. in italy, concerns about their finances and how they are shaking out, and it has spread to a host of other countries where interest rates doubles. like going from 3 percent to 6 percent like that. in a day. that's the kind of thing people worry about happening here. could it happen here? john? >>guest: most of the investors, the institution am investors feel they have a tremendous sinking feeling about the market and you mentioned earlier that today is the 100th anniversary of the we titanic and the jobs report could have been the tip of the
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iceburg of what is on the horizon and like grasso said we need policy to talk about creating jobs, someone out there that can talk about how to overcome the global growth american. bernanke is talking about qe3, more lose money rising the prices of commodities causing more concerns here for inflation, and, possiblying growth. it is not a good sign. >>neil: but it could be if you look at the kickoff of the earnings spread and a good deal of worry, normally what happens every three months, companies come out with their quarterly report card, how they are doing and a lot of concern going into this earnings period led off with alcoa and they could be facing head win. alcoa acknowledging that it does but reporting numbers that appear, i stress, appear, to be better than thought, most were expecting a loss of about three cents a share on a operating
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basis thought a loss at all. we are crunching the numbers but it would appear to be better and alcoa appears to be respectable growth abroad. that could be interesting because there have been concerns that for the first time after nine quarterly gains in earnings, this could be the first down, this quarter. >> lock back and you want to talk about artificial stimulation and bernanke's policies that have helped the markets and banks but are not helping main street america. most of those good earnings have been great cutting, cutting jobs, cutting confidents, cutting costs and expenses. >>neil: and alcoa's numbers they have $1.7 billion on cash. on hand. under the mat. >>guest: well, many people
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have resorted to putting cash in coffee cans because there is no interest in the bank. >>neil: you are worried how the earning seasons will end? >>guest: i am concerned about this earnings season. i am looking closer at the numbers and if you want to see what could sink this market, what could be 1,000 to 1,500 points look inside the earnings reports of their guidance and if anyone lowers their guidance, like caterpillar, relying on the emerging markets like china and others to they talk about lowering the guidance because of global inflation or growth concerns, that could be what sinks the market. >>neil: thank you, john. as we crunch through the alcoa numbers and i don't want to obsess about alcoa or any other number but it is the kickoff and it seems to be saying that things are not just disasterous, alcoa reporting revenues and earnings slightly better than
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the estimate and, further more seeing slight grow abroad but hanging on to a lot of cash, usually, but not all the time, wren companies are hanging on to a lot of companies it is telling you something, and are they reluctant to do anything else so they just hang on to it as you would do at home. if you do not know how it will shake out at home, or a spouse could be in danger of using his or her job hang on to the cash. and my guest says president obama may want to take note and be very worried about this. >>guest: here is what is going on. what we see here as much as obama would like to queens -- convince himself and i would like to believe the economy is on solid rock footing here, but this is always this chance that the gains were inaccuratal and partly because as a legal
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observer and observer of the news, in europe you are putting band-aids on stuff and it can get worse and go off a cliff every couple of weeks. that has been a danger and the obama team is thinking too soon, things are fine and it will keep going. so, they need to be concerned about that and the fact that if romney is able to address those things, which i think he is, as an observer, they will have more of an issue than they think right now. >>neil: what amazes me and all presidents do this from either party, they get out of town. on a day people are getting increasingly concerned about what earnings are like and the status of the job situation, they would realize, look, that is not the environment you want to be talking up tax hikes.
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on anyone. just not a good message and not well received. >>guest: it is well received by the people he wants it well received by, which is the base. and for that reason the politics for him are decent but people look at the fact it does not raise that much money, and it does not address the deficit which is why the white house is trying to have it both ways by saying this is part of being responsible with the deficit and he would use it in deficit-themed speeches and now it is about fairness. he does believe about fairness, but it makes sense people think why are we trying to squeeze blood from a stone and this will not help with the main problem which is the deficit and romney needs to address that head on. now that the republican campaign could be settling down he can address that. >>neil: thank you. what the president was talking about the buff fell -- buffett
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rule if you make over $1 million you should pay 30 percent in taxes, they are paying 15 percent, and for those that invest on wall street, that is not good. would you invest when you know that there is a potential the cost of the capital could double? no. wake up!
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that's good morning, veggie style. hmmm. fohalf the calories plus vgie nutrition. could've had a v8.
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>>neil: sell off at the corner of wall and broad, some related to the president's call for higher taxes on the we wealthy. california democratic congresswoman supports what the president is trying to do by forcing the so-called buffett rule for those earning better than $1 million should pay 30 percent at least tax rate. do you think that undermined
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investing? >>guest: i represent one of the wealthiest constituencies in the country and i am telling you they tell me they know they cannot be the only ones making good on this economy. they want middle class americans to do well, as well. it is clear that if a secretary pays a higher tax rate than a millionaire, if the wealthiest are getting wealthier, and the middle class is losing out, their fate is worsening, something is very wrong with the system. >>neil: so, say, the way you address it and correct that would be since a lot of rich folks tend to get a lot of their income unearned, as they say, off dividends and capital gains that would mean doubling that tax rate and many on wall street say that would be very damaging
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because there is little reason to invest when the costs of investing is effectively doubles. what did you say? >>guest: i say it has worked in the past without the wealthiest getting a hand out and without them having to do their fair share. but i also say we can do more. >>neil: you are saying they are not doing their fair share? are you saying they are not doing their fair share? paying the lion share of the countries and the rich are not doing enough? >>guest: actually, they might, they are also benefiting to a much greater degree than what the taxes they are paying. you pay taxes because you are benefiting. and when the middle class is worsening, we know that we are not we standing up for what america is all about. >>neil: so the way to rectify that, the way to rectify you saying, then, that the way to
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reconcile that is to get the taxes high on the rich to bring them down, rather than provide an incentive to bring the middle class up, that seems kind backward. >>guest: it seems like it is counterintuitive because when we talk about what the middle class needs, it is the top 2 percent who put the pressure on those of us in the congress to not let what we know needs to happen, happen. they want to shred --. >>neil: don't they just want to see you cut spending? >>guest: but for the poor and the middle-class. it depends on who is going to be harmed by cutting that spending. >>neil: would you tell the rich who are happy, if the rich are happy to pay more taxes if it goes to get spending under control you telling me that will not change, you are just going to pay for more government? >>guest: no, i don't say that is what we do.
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i say we also go with the progressive caucus budget which bringing our troops home from afghanistan saving over $1 trillion over the next ten years. topping our investment -- stopping investment in nuclear --. >>neil: got you, got you, congresswoman. all right. all right. all right. we will have more.
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>>neil: rick santorum out and stocks down and out on a day that romney is loop for both of the above saying this is a combination he would like to say. of course that is not what he
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would say. and now, on phone, my guest, bob, what do you make of the developments and for rick santorum? >>guest: very surprising to me. had he called me to ask my opinion, as you know i would have told him, stay in the race. we just reached half point mark of game and let romney amass the delegates he needs and that is the team to get out but i am not the candidate or the candidate's family. they need to make that decision. and candidates need to make that decision and hopefully he does what was in the best interest of the country. >>neil: your support early galvanized a lot of folks and said maybe this is not such a crazy negligence to support this guy and that, really, timed the iowa turn an and carried it to ten other states in this long winding process to the senator's advantage but not enough. in his remarks, he never, that
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is, senator santorum mentioned romney's name and am i to get from that, there is still some bad blood? or he forgot? >>guest: everyone is rushing to judgment saying we need to rally around nominee. he is the nominee. everyone needs to take a deep breath. if romney does end up being the nominee, that responsibility is on his surelies to unite the people of iowa and the people of america, around his candidacy. for him to win the presidency. it is on his shoulder to unite rick santorum and newt gingrich around the candidacy. i have to believe as you talk about it has to be a good day for romney and i think newt gingrich is saying county well, they have come to me before, and we will go to some states are conducive do my candidacy, and lou about --. >>neil: you are a candidate now? is newt gingrich your candidate?
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>>guest: i have not endorsed newt gingrich or romney, i only endorsed rick santorum and i found out as you did, a couple of hours ago, that he suspended the campaign. so, it is a time for deep breath. there is a lot of time between now and election day. and the national convention to take place. it will be romney's responsibility to be the nominee to unite people. >>neil: romney launched the senator's come back campaign. the announcement and now the questions of the money which republican candidate gets the cash right now and newt gingrich could pick up some of that. romney will pick up a lot of money. a lot people from the campaign will have to lick their wounds. but i do think the smartest thing the romney campaign could
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do would be to reach out to the top fundraisers for the campaigns for newt gingrich's campaign, for rick santorum's campaign. and get somewhat i like to call the low hanging fruit. not just focusing on the foster friess or whoever was behind him. >> foster said he could support romney. >>guest: just show a picture of obama, high gas prices, and the jobless rate, and, now, the market taking a dive. >>neil: you said whatever their mixed feelings about romney, their sympathies to the president is greater. >>guest: i don't think money is the crisis. this has been a great day for romney as you said for two reasons. he now has a chance to really pivot for the general election, and this is all done. and now --. >>neil: you do not see newt
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gingrich picking backing? >>guest: romney is the inevitable candidate. i think santorum got out because he did not want to lose the home state and the last primary we saw evangelicals are moving. romney has a problem in the general election, the bleeding problem, the "washington post" numbers this morning, he has an engagement problem. there is a nearive against obama that is strong. and it is not being made but not just negative romney has to re-engage. and he is viewed as distant and very wealthy person with people who matter, the swing voters. he has a model to his corner as a man would helped make him win ohio, michigan, and illinois, and that is donald trump who shows a multibillionaire can relate. can impa tthise with the normal
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person. >>guest: but they need a vice presidential candidate that is electability. >>guest: but picking a vice president would not matter if he does not have electability. >>guest: they can serve as connecting the dots where romney does not connect but serve as a very good fund hissing pool. like a chris christie. >>neil: but could the wind at his desk be the concern the economy could slip back. >>guest: i said it months ago, if we have another false spring as we did last year, just go to last year and the economy begins no the to prosper and we saw the weak job numbers and the selling off, that is the biggest factor that could affect the election. >>guest: i got off the tomorrow before i came off with a guy who ran dole's campaign in
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to texas and he said a lot of the big donors are reaching out without the romney campaign and try to get people, whether it is santorum and newt gingrich to give that money to so there is a group effort to unite the party. >>guest: the donors need to fill the vacuum which is, and others are talking about, can i have been saying, lack of opposition narrative to hold obama accountable on the issues. there it is energy. the pipeline. he is getting away with murder because he has the press. and the republicans have been having a negative contest. >>guest: but the democrats are getting off message like the war on women. >> the situation with women is not real but it is not the women's issues. >>neil: well the real issue is the economy and the markets that is the issue.
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our economy. >> the guy behind the study says not even close. and my guest was approved by president obama as a medicare trustee in 2010. you know the numbers, where are we leaded? what will happen? >> well, my study shows that what the passage of the health care law in 2010 has done to the federal budget it added $340 billion to projected deficits over the next 10 years under the best of circumstances if everything goes well under the law and potentially more than $500 billion to deficits under perhaps more realistic scenario. >>neil: that sounds worse than what paul ryan might have in mine. >>guest: well, that is right. the problem is this is not widely understood. because there have been a lot of analysis thrown around based off of government scorekeeping conventions which appear to show that the law makes it better rather than worse but the study
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dozen not show what happens and the consequence of changing a law if you go through and check how the law has changed as a result of health care reform it is clear it has add $1 trillion to federal spending and hundreds of billions to the deficit. >>neil: what if the supreme court knocks down the individual mandate provision? i imagine all estimates are off the table? >>guest: three possible scenarios. best case fiscal scenario they strike down the whole thing. worst case is they uphold the whole thing. where it is complicated is if they uphold the purchase mandate, rather strike down the purchase mandate and uphold everything else. in that, the fiscal damage property by the law to the federal government would be ameliorated because you will not have so many on the subsidizes exchange but a bad situation for health care consumers in which health care premiums rise by about 15 percent to 20 percent across the board.
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>>neil: to pay for coverage for everyone assuming the mandate thing is struck down, i know there is a medicare circumstance tax that goes into affect, if you sell your home, et cetera, but that will not be enough to cover the costs so, that is the big premium hike, right? >>guest: you have hit on the crumb of the problem which is that this law is trying to do two things. one, it is trying to extend the solvency of the medicare program and that costs money. and the other it is trying to provide subsidized health coverage to millions of americans and this costs a lot. both of those things cost a lot more than the cost savings you find in other parts of bill and that is why it adds to the deficit. >>neil: so you see nothing improving that would expect? we could have an economic boom but short of that it does not look good. >>guest: it does not look if the law is implemented as currently projected. now, if the congress were to
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make fiscal corrections to the legislation before it becomes fully effective in 201 we have - 2014 we have a chance but if we wait it will be very difficult to scale back the rising costs. >>neil: that medicare surtax provision, say the president loses this to the supreme court, could he or congress, but congress right now, could congress high the medicare tax above and beyond the $3.8 percent that it is targeted to be, to kept for theless of the mandate? >>guest: well, yes, you have to go back do the drawing board. for example, the entirety of the law were struck down, you would lose all those provisions that are credited for extending the solvency of medicare and congress would have to have something else and certainly, given where we have been that option would have to be on the table. >>neil: well, there are good ways to fine ways to raise
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taxes. thank you, chuck, very well explained. so, will this help kansas governor group back in his fight against the health care law? they call him governor "no," because everything washington, dc shoves done his throat he says no. >> weaker our economy look the bolder they getting over there? the former "uss cole" commander warning next about just that. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪ tle emotional here?r your future. aren't you getting a little industrial?
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>>neil: so when the economy is going down does the confidence of our enemies go up? author of "front burner," says absolutely. >>guest: when you look at this, attacking buildings and
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embassies, is housing united states interests, but attacking a war ship that affects our ability to protect our economy. that is act of war. >>neil: i look through the prix -- prism of being a market nerd, and at that time nasdaq was on fire, and stock market all time records and we had more money imaginable and we could have addressed a lot of stuff then, going after elements in yemen and elsewhere. now we are broker than broke. aren't we a lot more vulnerable on that basis? >>guest: absolutely, yes. not only you have to have capability but a willingness to use it. we are losing our capability and we don't have the option anymore using it because we cannot afford it. >>neil: so when our enemies see a sell off, the united states could dip into another recession or flat broke in washington, and the president just today saying we will hike
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taxes on the rich and it will be done in the name of fairness, and on and on, do they just say, this is looping good? >>guest: for them it is not so much good as a window of opportunity. this is a chance for us because when you do not have strong economies around the world providing for people by having jobs they can give to their families and be able to use things to improve their lives they begin to gravitate and turn toward things that radicalize them and make them angry with the governments they feel are repressing thief and not providing for them and they turn toward what this see as a symbol of a government that has way too much and does too little which is ours. and it is unfortunate. that is why you see the anti-american e and some of the hostility around the world toward the united states inwith, in fact, we don't have the economy any more than is capable of supporting some of the extending protections we need to have for our citizens overseas. >>neil: the military is such a big target, $600 billion a year, so, you have relatively
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conservative congressman who say we could trim a little here. youing a, be careful what you go for, here, because you laying with a knife, right? >>guest: you. you is to lock at, if you have a security strategy for a nation of which the military is a major component and the ability to safeguard united states interests and our economic interests overseas you have to be able to articulate what risk are we willing to enoccur if we degrade it. if we are drawing back. >>neil: but western problems going on, the markets here and abroads commander, and is something bigger at play. you warned in your book about getting us out because a lot of people do not like us. you argued it through the clinton years last year and you argued through bush. but what is the disconnect? >>guest: the disconnect is a lot of people are insulated sitting in washington who do not understand what is really going on, either on the water front or the fox hole and they think that
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is someone else's issue because you have a small all volunteer force protecting our freedoms around the bleep and americans love to be supportive they are not connected to those young men and women that are fighting for us. >>neil: what do we do? if we look at a country that is broke and looking at constant wantings we never heed, and why want to give the book away, which i urge viewer dozen -- viewers to read, you urged about something could happen the morning of 9/11 and it has been confirmed by others. that is spooky stuff. but we have not follow-up and learned from other incidented. are we doomed? >>guest: we have to be very careful the more we withdraw from that doctrine where we say, why wait to take a punch in the face, what we need do is make sure we are getting the correct intelligence analysis. >>neil: what would you do
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about iran? >>guest: i would take a hard look if we are getting the intelligence we need, we have to look that at a regional basis. there are a lot of elements in place. striking iran could sound symbol but what are the second and third order effects? >>neil: there is battle far technique and commitment fatigue, and ahmadinejad and iran, and, syria, they know this, and they capitalize on it. and our economic problems. >>guest: they worked that angle to their advantage but we need to take a look at it and say, what can we do and if you are fatigued, it does not matter. defending a nation does not rely on tired people but it relies on dedicated young men and women who do what is necessary to defend their homes and families. >>neil: commander, you are a hero "front burner," is the book, from the "uss cole", the event that prefaced the war on terror. my only wrap against the commander, he is too modest, i
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know about some of the details along the way, very, very modest. if i wrote the book i would have given myself the bronze star. and a guy who probably who is given himself a couple of bronze stars did you hear what senator schumer just said? schumer just said? i cannot believe it. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers.
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>>neil: the rich todays someone else tomorrow? >> that is not an argument again it. you have to start somewhere. >>neil: something about tax rates. play this again. rewind the tape. >> have to start somewhere.
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>>neil: got to start somewhere? all right. so, the rich today, the not so much tomorrow we get up to 39.6 percent for the top rate. where does it go for other rates? ending at that rate in and on and on and on. and my guest says when the fix is in the targets get wider. we did invite senator schumer to appear on the today show and no response. what do you make of it? >>guest: all through history what we have seen is that any time the politicians want more money they have to go after the middle class. (a) that is where the money is. (b), rich people have a lot of criminal over the timing, and the level and composition of income. if they do the buff get rule, they will not get any revenue. maybe it will be that much. very surf amount right here. so, they will do the buff get rule, go after the rich, and, then, when that does not help and the revenue is not there, they will say, we got the rich
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and now you guys in the middle class have to cough up money. and, we have seen that pattern in europe. we have seen that pattern in our own history. >>neil: but in england they cut back that millionaire tax, in japan, they were not getting the money they needed. that is the point they offered value add the tax rate by 3 percent and after the rich in japan and the japanese government announced a 5 percent increase, so, always --. >>neil: the end result? >>guest: the end result is economic stagnation but the key thing is higher tax rates on the rich do not raise money and you have to go after the middle class if you are a supporter of big government and that is why the middle-class is a giant bull's eye talking about the big
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spenders in washington. >>neil: what worries me the most, i am antispendthrift, anyway, and i, what worries me about the strategy, when they let their guard down, this is not about taking this money but it is in the name of "fairness. a a congresswoman said it was in the name of fairness so i pay more and others pay for, for more of the same. >>guest: not more of the same but more of bringing us a day closer to greece. >>neil: or is it just enough to get us to the next election? >>guest: election is the key word. >>neil: you get your core out. what does it do? is that enough to close the deal? is that enough to win over the independents? >>guest: maybe you will win an
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election, you hope they realize, and after that with the united states? everyone sees the projections but it is not just speculation we will become grease the congressional budget office forecast shows it will happen even under their optimistic scenario if we do not get control of the entitlements but obama thinks getting past the election, and the problem is, whether you are republican or democrat, the problem is the spending. the spending. >>neil: very good to see you. that isthank you. and now, today at the corner of wall and broad it does raise concern in the financial community when there is talk like this, talk of a slow down like there and hiking taxes, and add it up and all europe problems and you have a 500-point loss in five days. five days does not make a trend. but my guest is worried.or busi,
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rox, you're ready for real business. ford is having some sort of big tire event. i just want to confirm a few things with fiona. how would you describe the event?
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it's big. no,i mean in terms of savings how would you sum it up? big in your own words, with respect to selection, what would you say? big okay, let's talk rebates mike, they're big they're big get $100 rebate, plus the low price tire guarantee during the big tire event. so, in other words, we can agree that ford's tire event is a good size? big big not in this economy. we also have zero free time, and my dad moving in. so we went to fidelity. we looked at our family's goals and some ways to help us get there. they helped me fix my economy, the one in my house. now they're managing my investments for me. and th fidelity, getting back on track was easier than i thought. call or come in today to take control of your personal economy. get one-on-one help from america's retirement leader.

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